Faraday Future Pulls Plug On Auto Factory In Vallejo: Is This A Sign Of Financial Collapse?

Mar 27, 2017 06:00 AM EDT | Andrew Davis

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Faraday Future's future is moving faraway as this mysterious start-up company has recently pulled the plug on its plans of building an auto factory in Vallejo. Instead, it claims it will focus its corporate efforts on its Nevada plant.

Reuters reported that LeEco, the Tesla wannabe, is planning on selling the property that it purchased from Yahoo Inc. to a Chinese developer Genzon Group for $260 million. This is $10 million more than what they paid for it in June.

Pulling the plug on Vallejo comes 10 months following the City Council's approval on the start-up automaker's plan on creating its factory on the site. City officials had hoped that the factory would have brought in good jobs and hundreds of millions of dollars in investment to Mare Island, as promised by the start-up automaker. However, Vallejo also noticed that the company's outlook began to dim at the heels of rumors that it is strapped for cash and is more than behind in payments.

Regardless, Faraday Future is still interested in the 157-acre Mare Island site and could, in the future, start negotiations with the City Council, reports SFGate. "FF will stay in contact with the City and remains interested in acquiring land on North Mare Island in the future," according to Faraday Future in a press release. Further, the start-up company "would like to thank the city and its officials for their generosity and professionalism throughout this process, and looks forward to exploring future opportunities with the city."

Meanwhile, Faraday Future's interest in Mare Island has spurred other business who are looking into Vallejo. In fact, Andrea Ouse, Vallejo Community and Economic Development Director, said: "There's been a lot of upside to Faraday coming to the table and expressing such interest in Vallejo. It has daylighted the opportunities that are apparent in Vallejo right now for development. We are open for new businesses to come and relocate and expand."

Although this recent news doesn't indicate that Faraday Future will file bankruptcy, not yet anyway, it does point toward the start-up automaker's downward spiral, financially. Chinese billionaire Jia Yueting, LeEco CEO, acknowledged that the company had lost focus and grown too fast. On the contrary, Nevada State Treasurer told China Daily Newspaper that the billionaire ran out of money.

Now that the billionaire's money has bled out, senior executives have resigned, and suppliers claiming they were unpaid, you get the whole picture that Faraday Future's future is bleaker than it was last year. The delivery of its flagship EV, the FF91, which it claims could beat the Tesla's EVs, is now in question.

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